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NuHealth System Announces First Ever Operational Surplus

At a recent press conference held at Nassau University Medical Center, the president and CEO of the NuHealth System, Arthur A. Gianelli, was all smiles. He was pleased to announce the 2009 fiscal year numbers had been tallied and crunched to show a surplus of $804,000, marking the first time NuHealth has been able to report positive operating cost outcomes in its 10-year history. The financial data was compiled and received by Ernst & Young, the independently certified public accounting firm used by the organization.

For the formerly named Nassau Health Care Corporation, which runs NUMC, the A. Holly Patterson Extended Care Facility and several outlying clinics, the news has been a well-received change of pace. Gianelli emphasized it is important for people to recognize what got the organization to this point, and although future challenges might not always afford breaking into the black in subsequent years, this accomplishment was no small feat.

“It’s not that much, but even just breaking a little bit into the black is very, very significant for an organization like this,” he said.

The NuHealth system was created in September 1999 as a public benefit corporation, which promptly bought and assumed control of NUMC from Nassau County. Since that time the organization has struggled with habitual deficits every year, most recently going into the red at minus $6.4 million in 2007 and minus $23.6 million in 2008. Gianelli attributed the positive results to improvements that have been strategically implemented over the past 10 years, which he says have served to vindicate the approach taken by management to supervise the needs of the organization.

While expressing his thanks to all the members of the NuHealth System at the press conference, Gianelli made sure to channel the bulk of his praise towards the financial guru of the corporation, Gary E. Bie, executive vice president for finance and CFO.

“Without his financial stewardship, his smarts, and street fighter attitude as relates to finances in this company, we would not have been in position for 2009 and we would not going forward in 2010 and beyond….a credit to how you do financial management the right way in a very challenging situation,” Gianelli said.

Bie spoke from the podium to offer an overall synopsis and explain how the organization approached the bottom line goals, emphasizing the imperative installation of many budgetary initiatives to create much more than simple one-time improvements. He expressed that NuHealth has been able to save roughly $250 million per year by focusing on revenue improvements and expense reduction initiatives.

“This $250 million in improvement to the bottom line has yielded roughly in excess of a billion dollars in savings over a nine to ten year period, which is substantial,” Bie said.

As both men introduced the positive rewards reaped from the strategic sowing of the past 10 years, not everything for the future appeared to have such a sweet sugar coating. Presenting a levelheaded, mindful approach as evidenced by Gianelli’s words, it was clear that the public benefit corporation could encounter bumps on the road ahead.

“We’re not in any way out of the woods… we have succeeded this year and our expectation is that we will be able to rise to the challenges of the future, but those challenges get harder and harder each and every year,” Gianelli said.  

The decline in federal and state reimbursements will begin to take effect this year. Additionally, the significant pension contribution costs touched on by Gianelli also echoed in the message driven home by Bie.

“This pension increase that we are facing in 2010 is a $28 million payment for this $550 million operation,” Bie said. “That number is continuing to go up and it’s gonna challenge what we have to do as an organization to survive.”

The NuHealth umbrella of services operates with an annual budget in the ballpark of $550 million, employing about 3,800 employees. Additionally, NUMC is the only safety-net hospital in Nassau County that provides comprehensive health care to residents that are unable to pay.